Deputy President Kithure Kindiki has announced another significant reduction in bank lending rates set for March 2025, continuing a downward trend aimed at increasing access to affordable credit.
The rate cuts follow the Central Bank of Kenya’s (CBK) decision to lower its base lending rate for the fourth time this month, a move designed to stimulate private sector borrowing and economic growth.
Speaking during a consultative forum with Meru County leaders at his Karen residence, Kindiki emphasized that commercial banks are now actively seeking borrowers.
“These interest rates you have seen Equity Bank, Cooperative Bank, and KCB lowering by between 2% and 3%—they will drop even further next month,” he stated.
He explained that banks had previously hesitated to lend to businesses because they were profiting from government borrowing. However, with the government now stepping back from bank loans, financial institutions are being forced to shift their focus back to the private sector.
“Banks were not lending to businesses because the government was taking up that money. Now that we are no longer borrowing, banks will have to seek out customers and provide credit—just like during President Mwai Kibaki’s administration,” Kindiki remarked.
The move is expected to make business loans more accessible, reduce the cost of credit for individuals, and drive economic growth by encouraging investment and entrepreneurship.
